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June 11, 2007

Sounds of science | After purchasing a competitor, Rudy Graf prepares for big growth at his Waldoboro company, The Science Source

By Kerry Elson

Summer has always been busy for Rudy Graf. His company, The Science Source in Waldoboro, makes equipment for science classes — fiberglass models of blood cells, tiny wooden cars to measure velocity and kits that turn soda bottles into rockets. Most orders for the company's 500 products come in June, July and August, when teachers are preparing for the next school year.

This summer, however, Graf will be especially busy. In April, The Science Source acquired Daedalon Corp. of Salem, Mass., a company that makes equipment for college-level physics classes, for $700,000, which includes the cost of a 2,000-square-foot expansion to accomodate the company. Since then, Graf and his staff of 40 have been unpacking boxes of Daedalon inventory, a process Graf admits can be overwhelming.

"It's a bit more chaotic than I would like it to be," Graf says, standing in the packed warehouse of the 18,000-square-foot plant, "but in a few months it'll be taken care of."

For Graf, the acquisition is a big opportunity. Since he bought The Science Source in 1986, sales have grown an average of three percent to four percent each year, but this purchase could boost sales 30% over the next year, thanks to Daedalon's nationwide customer base and more pricey products, including devices that measure electric currents and light particles. (Graf wouldn't release the company's annual revenue.) With the acquisition, Graf hired two more workers and hopes to hire four more by year's end.

Graf is proud to note, too, that while other manufacturers in Maine have closed due to foreign competition, his has grown, from five employees in 1986 to 40 this year. While competitors in India and China may take weeks to ship their products to the United States, Graf says, his company can ship in a few days.

This isn't Graf's first acquisition. Since 1986, he's bought a half-dozen smaller companies, which he says is the only way to grow the business because it is difficult to persuade teachers to try new products. "If teachers become comfortable with a product, they'll use it for years," he says. "Education in this country is very conservative. It's a giant ocean liner — you don't turn it that easily."

Instead, Graf buys companies that specialize in different age groups or academic disciplines. In 1987, Graf bought a publisher of biology and chemistry textbooks, adding to The Science Source's core line of equipment for physics classes. In 2002, he bought a company that made equipment for biology classes. Each acquisition was larger than the last. To offset the cost of the Daedalon acquisition, Graf applied last year to be part of the state's Pine Tree Zone program, which offers tax breaks to stimulate economic growth. The company was accepted to the program last month.

Graf had little experience in education when he bought The Science Source. At the time, he was an executive at Englehardt Corp., a New Jersey-based chemical products company, but was looking to run his own business. During a vacation in Maine, an acquaintance directed him to a tiny woodshop in Jefferson called Bond Manufacturing Co., which made wooden demonstration kits for high school physics classes. Graf made an offer to buy the company, and a year later moved it to Waldoboro, renaming it The Science Source.

Graf isn't as involved with The Science Source these days. Last year, he ceded day-to-day operations to General Manager Paul Rogers, and named himself company chairman. Graf still goes to work a few days a week, though, to help with the Daedalon merger and brainstorm new markets, including home-schooled students and foreign sales. Just a few weeks ago, he reports, the company received an order for more than 900 science kits for 150 high schools in northern Iraq. "The best years of my life have been the last 20 years," he says.

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